On November 17, 2020, the Aomsin Bank Board approved the bank's investment in Quick Cash Co., Ltd., a subsidiary of Sri Sawad Corporation Public Company Limited (SAWAD). The bank will invest in common shares not exceeding 49% of the total shares for an amount not exceeding 1.5 billion baht to engage in the vehicle registration pledge loan business.
Mr. Witthaya Rattanakorn, Director of Aomsin Bank, stated that the bank aims to issue loans to 1 million customers in the first year of its vehicle registration pledge loan business, with a loan volume of approximately 20 billion baht, expecting good returns in a short time. It is anticipated that within 3 years, the joint venture will be listed on the stock exchange.
The joint business operation is expected to start around the first quarter of next year. The goal of this joint venture is to reduce the interest rate structure of the loans to 18%, compared to the current maximum interest rate of 24%. It is believed that the impact on market interest rates will occur within 2 years.
"Reducing the interest rate does not mean we will incur losses; on the contrary, it will provide us with good returns in the short term. The interest rates offered will be at appropriate levels. The return on the loan interest compared to the deposit interest of state banks is currently below 2%, while commercial banks are at 3-3.5%. The vehicle registration pledge business is at 15-20%. The collaboration with Sri Sawad is considered very generous," he added.
Currently, there are 3 million customers in the vehicle registration pledge loan market, with over 3 million more who have not yet accessed the system. Therefore, the bank aims to assist this group of customers in accessing funding at lower interest rates. The bank has 1,000 branches to provide services, plus an additional 5,000 branches from Sri Sawad, which is believed to be sufficient to support the service.
Ms. Thida Kaewbutta, Director of Corporate Strategy at Quick Cash Co., Ltd., stated that in the initial phase of service, they will focus on existing Aomsin customers who have a good payment discipline. Existing customers of the company can also choose to use the new loans offered by the company.
"We have been in this business for 40 years, with branches serving in community groups, allowing us to closely monitor customers. We believe we can manage the risks involved and will be able to issue loans within 15-30 minutes," she said.
SOURCE : www.bangkokbiznews.com
